At common law, apart from the customs of the law merchant, the rights or benefits arising out of a contract, or, as it is generally termed, a chose in action, cannot be assigned so as to entitle the assignee to sue upon it in his own name.47 This is a settled and inflexible rule, and its effect cannot be avoided by stipulations of the parties, as by an express provision in the contract to the effect that it may be assigned, provided, of course, the stipulation does not render the contract a negotiable instrument, and so bring it within the law merchant.48

As will be seen, however, the assignment creates rights in equity, and the common law so far takes cognizance of these equitable rights as to permit the assignee to use the name of the assignor, or his representative if the assignor be dead, as trustee for the assignee, so that he may sue on the contract in their name. An equitable assignment of a chose in action is in the nature of a declaration of trust by the party having the legal right, and an agreement on his part to permit the assignee to make use of his name to enforce it.49

47 Leake, Cont. 601; Co. Litt. 214a, 232b; 2 Bl. Comm. 442; Greenby v. Wilcocks, 2 Johns. (N. Y.) 1, 3 Am. Dec. 379; Hay v. Green, 12 Cush. (Mass.) 282; Hunt v. Mann, 132 Mass. 53; Glenn v. Marbury, 145 U. S. 499, 12 Sup. Ct. 914, 36 L. Ed. 790. "The origin of the rule was attributed by Coke to the 'wisdom and policy of the founders of our law' in discouraging maintenance and litigation; but there can be little or no doubt that it was in truth a logical consequence of the primitive view of a contract as creating a strictly personal obligation between the creditor and the debtor." Pol. Cont. 206. See "Assignments," Dec. Dig. (Key-No.) § 23; Cent. Dig. §§ 40, 41.

48 COOLIDGE v. RUGGLES, 15 Mass. 387, Throckmorton Cas. Contracts, 324; Weidler v. Kauffman, 14 Ohio, 455; Legro v. Staples, 16 Me. 252; Little v. Bank, 2 Hill (N. T.) 425; Id., 7 Hill (N. Y.) .359; People v. Gray, 23 Cal. 125. See "Assignments," Dec. Dig. (Key-No.) §§ 22, 23; Cent. Dig. §§ 35-41.

Strictly speaking, the only mode by which the rights under a contract can be really transferred at law is, not by assignment at all, but by means of a substituted agreement. If A. owes B. $100, and this action to be maintained is the rule of law that a bare promise cannot be the foundation of an action." 53

B. owes C. $100, it may be agreed between all three that A. shall pay C. instead of paying B., so that B. thereby terminates his legal relations with both parties. In such case the consideration for A.'s promise is the discharge of B.; the consideration for B.'s discharge of A. is the extinguishment of his debt to C.; the consideration for C.'s promise is the substitution of A.'s liability for that of B. This is known as a "novation." 50 To effect such a change of relations, there must be ascertained sums due from A. to B., and from B. to C.; and it is further essential that there shall be a definite agreement between the parties, for it is the promise of each which is the consideration for the promise of the others. It would not be enough for A. to say to C, "I will pay you instead of B.," and to afterwards suggest the arrangement to B., and receive his assent.51 Nor would it be enough for B. to authorize A. in writing to pay to

C, and for A. to acknowledge the paper in writing.52 In neither of these cases would there be such an agreement between all three persons as to amount to a discharge by B. of the debt due by him to A. There would, therefore, be no consideration for A.'s promise to pay C, so as to support an action by C. against him. In an action under the circumstances of the second case mentioned above by C. against A. it was said: "There are two legal principles which, so far as I know, have never been departed from. One is that, at common law, a debt cannot be assigned so as to give the assignee a right to sue for it in his own name, except in the case of a negotiable instrument; and, that being the law, it is perfectly clear that B. could not assign to the plaintiff the debt due from the defendant to him. * * * The other principle which would be infringed by allowing

49 Leake, Cont. 602; Welch v. Mandeville, 1 Wheat. 233, 4 L. Ed. 79; Hal-loran v. Whitcomb, 43 Vt 306; Fay v. Guynon, 131 Mass. 31; Frear v. Evert-eon, 20 Johns. (N. Y.) 142; Parsons v. Woodward, 22 N. J. Law, 196; Mc-Wiliiams v. Webb, 32 Iowa, 577; Webb v. Steele, 13 N. H. 230. See "Assignments," Dec Dig. (Key-No.) § 48; Cent. Dig. §§ 85-111.

50 Post, p. 528.

51 Cuxon v. Chadley, 3 Barn. & C. 591. See "Contracts," Deo. Dig. (Key-No.) § 240; Cent. Dig. § 1125.

52 Liversidge v. Broadbent, 4 Hurl. & N. 603. See "Contracts," Deo. Dig. (Key-No.) § 240; Cent. Dig. § 1125.

Same - Recognition Of Equitable Assignment In Law

Courts of common law recognize the validity of equitable assignments for other purposes than to permit the assignee to sue at law in the name of the assignor. An assignment of a chose in action has always been held a good consideration for a promise.54 Thus, the benefit of a contract may be sold, and the assignment of the contract forms a valuable consideration for a promise to pay the price, which may be recovered in an action at law.55 The forbearance by the assignee of a debt to sue the debtor is a good consideration for an express promise by the debtor to pay the assignee, and on this promise the assignee may maintain an action in his own name.66 He must sue on the debtor's promise to him, and not on the promise to the assignor assigned to him.